38-770

38-770. Eligible rollover distribution;
definitions

A. Notwithstanding any other provision of this article that would limit a
distributee's election under this section, a distributee may elect, at any time and in
the manner prescribed by the board, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the distributee in
a direct rollover.

B. An eligible rollover distribution may commence less than thirty days after the
notice required under section 402(f) of the internal revenue code is given to the
distributee, provided that both:

1. ASRS clearly informs the distributee that the distributee has a right to a
period of at least thirty days after receiving the notice to consider the decision of
whether or not to elect a direct rollover.

2. The distributee, after receiving the notice, affirmatively elects a
distribution.

C. In addition to the other elections permitted in this section, effective for
distributions made from and after December 31, 2006, a designated beneficiary of a member
who is not the member's surviving spouse may elect, at any time and in the manner
prescribed by ASRS, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan described in subsection D, paragraph 3,
subdivisions (a) and (b) of this section. For the purposes of this subsection,
"designated beneficiary" has the same meaning prescribed in section 38-775.

D. For the purposes of this section:

1. "Direct rollover" means a payment by ASRS to the eligible retirement plan
specified by the distributee.

2. "Distributee" means a member, a member's surviving spouse or a member's spouse
or former spouse who is the alternate payee under an acceptable domestic relations order
as defined in section 38-773.

3. "Eligible retirement plan" means any of the following that accepts a
distributee's eligible rollover distribution:

(a) An individual retirement account described in section 408(a) of the internal
revenue code.

(b) An individual retirement annuity described in section 408(b) of the internal
revenue code.

(d) A qualified trust described in section 401(a) of the internal revenue code.

(e) An annuity contract described in section 403(b) of the internal revenue code.

(f) An eligible deferred compensation plan described in section 457(b) of the
internal revenue code that is maintained by a state, a political subdivision of a state
or any agency or instrumentality of a state or a political subdivision of a state and
that agrees to separately account for amounts transferred into the eligible deferred
compensation plan from ASRS.

4. "Eligible rollover distribution" means distribution of all or any portion of the
balance to the credit of the distributee but does not include any of the following:

(a) Any distribution that is one of a series of substantially equal periodic
payments made not less frequently than annually for the life or life expectancy of the
member or the joint lives or joint life expectancies of the member and the member's
designated beneficiary or for a specified period of ten years or more.

(b) Any distribution to the extent the distribution is required under section
401(a)(9) of the internal revenue code.

(c) Except as provided in this paragraph, the portion of any distribution that is
not includable in gross income. A distribution does not fail to be an eligible rollover
distribution merely because the portion consists of after-tax employee contributions that
are not includable in gross income if the portion is paid only to an individual
retirement account or annuity described in section 408(a) or 408(b) of the internal
revenue code, to a qualified plan described in section 401(a) of the internal revenue
code or an annuity contract described in section 403(b) of the internal revenue code that
agrees to separately account for amounts so transferred, and earnings on those amounts,
including separately accounting for the portion of the distribution that is includable in
gross income and the portion of the distribution that is not includable in gross income.

(d) Any distribution that is made due to hardship of the member.